DEV MARKETING vs. ASSESSMENT UNIT (ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX) N.F.A.C. AND 3 ORS

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WP/4432/2022HC Bombay21 April 2025Bench: HON'BLE SHRI JUSTICE M.S. SONAKHON'BLE SHRI JUSTICE JITENDRA SHANTILAL JAIN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that there was a clear violation of the principles of natural justice. The Court accepted the Revenue's submission that a bona fide error occurred in not granting the opportunity of hearing to the Petitioner. Consequently, the Court set aside the impugned assessment order dated 09.08.2022. The matter was remanded back to the Assessing Officer with a direction to carry out the assessment afresh after giving an opportunity of hearing to the Petitioner and also providing a draft assessment order. The Court stipulated that this exercise must be completed within three months of the order's upload, and the Petitioner agreed not to raise any limitation issues if this timeline was adhered to. All other contentions of the parties were left open.

What were the facts?

The Petitioner, Dev Marketing, challenged an assessment order dated 09.08.2022 passed by the Assessment Unit. The Petitioner contended that the order was made in breach of natural justice principles, specifically that their request for a personal hearing, even via video conferencing, was not granted, contrary to Section 143(3) read with Section 144B of the Income Tax Act, 1961. The Revenue, through an affidavit filed by Mr. Shashikant Singh, Assistant Commissioner of Income Tax, admitted that a bona fide error occurred in not granting the requested hearing. The Revenue proposed to set aside the assessment order and remand the matter back to the Assessing Officer to grant an opportunity for a personal hearing and thereafter pass appropriate orders.

What were the issues?

1. Whether the assessment order dated 09.08.2022 was passed in violation of the principles of natural justice, specifically concerning the denial of a personal hearing to the assessee, as contemplated under Section 143(3) read with Section 144B of the Income Tax Act, 1961? Assessee's Contention: The Petitioner argued that the assessment order was passed in breach of natural justice as their explicit request for a personal hearing was not granted, which is a violation of Section 143(3) r/w 144B of the Income Tax Act. Revenue's Contention: The Revenue, through an affidavit, conceded that a bona fide error occurred in not granting the opportunity of hearing through video conference as requested by the assessee and agreed by the Assessing Officer. They submitted that the error was a bona fide mistake and prayed for the assessment order to be set aside and the matter remanded back to the Assessing Officer for a fresh assessment after providing an opportunity to be heard.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 142(1)

AI-generated summary — verify with the full judgment below

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WP 4432-2022 (J).doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 4432 OF 2022 Dev Marketing .Petitioner Flat No. 11/12, Plot No. 10, Jeevan Jyoti Building, Tarun Bharat Society, Chakala, Andheri(E), Mumbai – 400 099. Vs. 1. The Assessment Unit [Additional/Joint/ .Respondents Deputy/Assistant Commissioner of Income Tax], National Faceless Assessment Centre, Room 401, 2nd Floor, E Ramp, Jawaharlal Nehru Stadium, Delhi – 110 003. 2. The Deputy Commissioner of Income Tax-26(1) Bandra – Kurla Complex, Mumbai. 3. The Pr. Commissioner of Income Tax – 26 C-11, 6th Floor, Bandra – Kurla Complex, Mumbai. 4. Union of India, Aaykar Bhavan, M. K. Road, Mumbai. Mr. Mandar Limaye, Advocate, for the Petitioner Mr. Akhileshwar Sharma a/w. Ms. Shraddha Worlikar, Advocates, for the Respondents Anand 1 of 4

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WP 4432-2022 (J).doc CORAM : M. S. SONAK & JITENDRA JAIN, JJ.

DATE : 21.04.2025 ORAL JUDGMENT (PER: M. S. SONAK, J.) 1. Heard learned Counsel for the parties. 2. Rule. The rule is made returnable forthwith. By consent, the Petition is taken up for final hearing. 3. The Petitioner challenges the impugned assessment Order dated 09.08.2022 on the ground that the same was made in breach of the principles of natural justice. Learned Counsel for the Petitioner pointed out that though the Petitioner had requested explicitly for a personal hearing, the same was not granted to the Petitioner in violation of the provisions of Section 143(3) r/w. 144B of the I. T. Act. 4. Mr. Shashikant Singh, the Assistant Commissioner of Income Tax, has filed an Affidavit in this matter. Paragraphs 6 to 11 of this Affidavit are relevant and are transcribed below for the convenience of reference: - “6. In the case of Petitioner, notice u/s 143(2) dated 29.06.2021 was issued. Thereafter, Notice u/s. 142(1) dated 27.10.2021, 01.12.2021, 24.12.2021 and 05.01.2022 were issued to the assessee. In response, the Petitioner submitted its response on 11.01.2022. Further notice u/s. 142(1) dated 14.01.2022 was issued, in response to which, the Petitioner has Anand 2 of 4

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WP 4432-2022 (J).doc furnished reply on 14.01.2022 and 16.02.2022. The AO has issued show cause notice on 24.02.2022 to which the assessee furnished reply on 02.03.2022 wherein the Petitioner requested for a video conferencing to discuss and explain technical issues was made. 7. Thereafter, on 09.08.2022, assessment order was passed. However, a bona fide error happened in granting opportunity of hearing through the video conference as requested by the assessee and agreed by the Assessing Officer. 8. I say that proceedings under the Income – tax Act 1961 are non-adversarial and therefore, where a bona fide error happened, it is the duty of the Respondent to address that error in the interest of both the revenue and the Petitioner. 9. In view of the above, I humbly say that the error was a bona fide mistake but which was not intentional. 10. In the facts and circumstances, I humbly pray that this Hon’ble Court may be pleased to set aside the remand the matter back to the Assessing Officer, for grant an opportunity to the Assessee for personal hearing and thereafter pass appropriate orders. 11. In the circumstances, it is humbly submitted by the respondents that the Hon’ble Court may be pleased to set aside the assessment order assessment dated 09th August, 2022 passed under Section 143(3) r/w Section 144B of the Income Tax Act, 1961 and consequential notices thereto and matter be remanded back to the Assessing Officer with directions to respondents to frame the assessment afresh de-novo after giving opportunity to be heard to the Petitioner/Assessee and also after providing draft Anand 3 of 4

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WP 4432-2022 (J).doc assessment order.” 5. Considering the fair approach reflected in the above Affidavit filed by Mr. Shashikant Singh and on being satisfied that this was indeed a clear case of violation of principles of natural justice, we set aside the impugned assessment Order dated 09.08.2022 and remand the matter to the assessing officer with a direction to carry out the assessment afresh after giving an opportunity of hearing to the Petitioner and also providing a draft assessment Order. This exercise must be completed within three months of uploading this order. Learned Counsel for the Petitioner agrees that no limitation issue would be raised provided the assessment is completed within three months of uploading this order. 6. All other contentions of the parties are left open. The rule is made absolute in the above terms without any costs order. 7. All concerned are to act on an authenticated copy of this order. 8. At Mr. Sharma's request, we note an error in paragraph 7 of the Affidavit since the word “not” does not appear between the words “not granting” in line 2 of paragraph 7. Since the error is obvious, we read the correction in the said paragraph. (JITENDRA JAIN, J.) (M. S. SONAK, J.) Anand 4 of 4

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